An Algorithm for the Single-item Capacitated Lot-Sizing Problem with Concave Production and Holding Costs

We consider a multi-period single-item production scheduling problem with a deterministic, time-varying demand pattern and concave cost functions. Optimal production lot sizes, so as to minimize the total costs of production, set-up, and inventory, are determined subject to dynamic production capacity and no backlogs. The proposed algorithm was tested extensively by solving several randomly generated problems with varying degrees of complexity. The proposed algorithm appears to perform quite reasonably for practical applications.